Welcome to What the Duck?! A podcast with real experts talking about direct spend challenges and experiences, and now here’s your host, SourceDay’s very own Manufacturing Maven, Sarah Scudder. Thank you for joining me for What the Duck?! Another Supply Chain Podcast brought to you by SourceDay. I’m your host, Sarah Scudder, and this is the podcast for people working in the direct materials part of supply chain. I’m @SarahScudder on LinkedIn and @SScudder on Twitter.
Today, I’ll be joined by Jose Socorro, and we’re going to discuss the logistics of direct materials and where to look for improvements. If you work for a manufacturer and are looking to improve the efficiency of your logistics for direct materials, then this episode is for you. Jose has been in logistics for over five years as a broker, fleet manager, and shipper. He’s also a wedding DJ on the side and an amateur saxophonist and a 5k organizer. So, welcome to the show, Jose. Thank you for having me, Sarah.
So, craziest wedding DJ story, we have to start there. Well, there was one wedding a couple of years ago in Oklahoma City where the coordinator and the photographer were not getting along. It was Labor Day Monday, and the cake had somehow gotten destroyed from where it was coming from to The Venue. So, the coordinator left to go pick one up at Sam’s Club. And so, I’m stuck with a very, very opinionated bride, vendors aren’t getting along, and so what was crazy is that there were so many things happening, for example, setup, moving things around, and I’m like, ‘This is way too much.’ Well, what happened is that the photographer was supposed to leave by a certain time, and we were like an hour and a half from that happening, and we hadn’t even started the reception. So, I just had to go into logistics mode. This is pre-logistics days and pretty much put a plan together of, ‘We need to do this by a certain time,’ and we got it done, thankfully. But it was like down to the wire, getting that recovery option truck and making sure it hit OTD or that direct material getting a truck and getting to where it needs to at time. So, it was just very nail-biting, kind of like the University of Texas when they beat USC in the Rose Bowl with Vince Young, for those Texans out there listening. So, it was kind of like that visual, and that was crazy. It was like risk management, risk mitigation in full effect. We had no idea vendors fighting each other, and I just said, ‘We need to get this done because you’re not going to get everything you need.’ So, and at the end of the night, what was interesting was that the bride was tearing down, and all the guests were sitting there watching. She was helping tear down, and I was like, ‘Wow, this is speechless,’ but I had other things to worry about. What not to do when planning and executing a wedding. Yes, make sure you have people that will help you tear down.
So, your football reference was very appropriate, since I am based in Austin, and our company and team is based in Texas, so lots of football fans listening to this podcast. Yes, and actually, your basketball team has a guy that used to play at my school, UT, his name is Max Asus, and he’s going to be a great addition to the program. So, Texas has a lot to look forward to this season, basketball-wise, where I am not a huge sports fanatic, but it is definitely a sports fanatic city, absolutely.
So, Jose, I want to go back in time and have you talk about how you got your start working in supply chain logistics.
And one of the reasons why I asked you to come on the show is we haven’t had a ton of logistics guests, and I think it’s something that’s really, really important, especially when you’re working in manufacturing. You can produce your product, you can have the internal operations working properly, but if you can’t get your product to your end customer and if you can’t get your parts and materials into your shop on time, kind of nothing else. So it’s a really important part of the equation, absolutely.
So, how I got my start in supply chain is I met an Arkansas girl, and then usually when you want to marry an Arkansas girl, you move back to Arkansas. It’s in the Constitution and somewhere in the Bible too: ‘Thou shalt marry Arkansas girl, move to Arkansas.’ And so, I did that, and at the time, I worked for a recruiting firm doing some sales, and then I had a recruiter from JB Hunt who recruited me via LinkedIn. It didn’t work out, but we stayed in contact. They had a career fair, well, the career fair was for their, what they call IC division, which is their brokerage arm at Hunt, and they were hiring folks. I interviewed with a gentleman who had been at JB Hunt for a while, and what really got us going was that we’re both from the Northeast, we lived in New Jersey, and we liked the Yankees, and so that conversation helped. And then he saw my body of work, said, ‘Well, you’re pretty impressive, and we’re looking for people that are willing to work and put the time in.’ So, that’s me, and so I got hired at JB Hunt, August 6 of 20, no, 2018, and the rest is history.
So, I worked on a team that was calling on many trucking companies to adapt a digital platform that would help companies get freight and use a system instead of going through a broker. So JB Hunt had multiple options, and this digital platform was the way to get increased inquiries, load volume, and help folks be more technology-savvy by the click of a phone or a computer. So, I did that for a few months, and then that team took on a different project. And then from that project, I was there for seven, nine months, and then I became a broker. So, I got my taste of reality of the world of logistics. Did that for a while. I was on a team that handled very expensive commodities. They were considered high value, which in the logistics industry, the standard insurance is about $100,000, and the cargo and the freight I was moving was over that. And anything over that, you’re talking about, it’s like getting a SWAT team, and you put your best foot forward because that’s very expensive freight, and you do not want to mess that up.
So I was on that team, and we had some successes. We won Branch of the Year because we took care of our customers, we found the right carriers, and we just took care of the business as if we were part of the business, right, Jose?
A couple of questions there, I’m gonna pause there. So if I am, our audience is people working for small and midsize manufacturers, yeah, right? So if I’m working for a smaller organization, when would I use a broker? Like when does it make sense to say, ‘I’m going to pick up the phone or establish a partnership with a third party’?”
“Perfect. As soon as possible. Brokers have trucks, brokers understand that they have to be able to find a common ground between profitability for the customer and for their company. But number two, also understand the rules and guidelines drivers are under Department of Transportation rules. They can only drive a certain number of hours a day and only certain days of the week before they have to do what they call the reset. So you call them as soon as possible.
And I’m going to deviate as well and say that I’ve had many companies reach out to me during my manufacturing days, and there’s all kinds of folks. I mean, I’ve had people that were already in-house, so I worked with them. And then I had folks that were referrals. And then you also have folks that they’re trying to get a date with you, like you’re on the Bumble app only for moving freight. So you don’t have to go on a date with them unless they do a good job and they want to take you out for dinner. That’s a different story. But you want to call as soon as possible.
I mean, you have asset carriers, which are companies that own the trucks and manage drivers. Then you have your standard 3PL, which are folks that are the middleman between the customer and the carriers. And it’s a great mix. But I would say call them as soon as possible, and you definitely want to do a trial run.
Now, one thing, manufacturing, I’ve learned, I’ve only worked for one manufacturing company. You can consider food manufacturing as well, to an extent. But one thing I can tell you is you need to have systems in place. So some manufacturing companies, they focus on the sole product that they provide, and then they branch off and they do logistics. And so sometimes I would encourage companies to have an open mind on what kind of technologies and resources they have with logistics. There are many out there. But definitely have an open mind and try to leverage those technologies. Make sure you have good processes in place, like the tension a lumper, as well as knowing and understanding the reality of product getting there on time.
The common thing that I learned when I was manufacturing is that non-logistics folks, they just think picking up direct materials is like going to a retail store, convenience store, picking it up or going to your local hardware store, getting that, and bringing it back. And it’s a lot more complicated than that. There’s a lot of bells and whistles. And the biggest, when you say, ‘When you say picking up your direct materials,’ are you talking about picking up the parts and materials and bringing them in-house for the correct production team to include in the assembly and part of the production process?
Absolutely, yeah. It would be very convenient if you could go to your local hardware store and deliver the product. But unfortunately, with manufacturing, it’s a complex mix of materials. And again, I’ll use the term ‘bells and whistles.’
And so it is, it has got to be meticulously calculated. The logistics folks have to have an open mind and learn to understand the process from ‘Here’s the order, I need this by.’ So if you are, we’re going to say hypothetical here, let’s say you’re based out of Northwest Arkansas, ‘Bville,’ we’ll call it Walmart land, and you are, we’ll say the industry I was in, Metal Manufacturing, and you’re needing to get metal coils to Northwest Arkansas because you have some orders going to different parts of the country. Okay, so if there are facilities in the Louisville, Kentucky area, Houston, Texas, Illinois area, and somewhere in West Virginia, okay, and then somewhere in the DTAs. But you get most of your material from the Kentucky area, Houston area, and Illinois area. Well, you’ve got to understand that depending on the material, the color of the coil, and what you’re looking to do with it, you’ve got to be able to order that stuff days in advance, not the day or two before you’ve got to load the trailer.
So one thing when I worked in manufacturing that the company did that I was with was very good is you have two days to plan your trucks. So a lot of times you would have your day-run carriers; they would prep their loads. They’re going here; your over-the-road drivers can go two or three days before they have to return back to the plant before they go on their next load. But if you’re needing something hot and heavy, you have to understand the risks that come with that. Cost is always going to be a factor. Hot and heavy meaning, ‘Oh shoot, I didn’t order this,’ or ‘My PO isn’t received,’ or ‘This isn’t on time, and I need this today.’ Is that what that’s one option? Or, ‘We just got an order, and we have half of the material we need, but we’re missing the other part.’
So, and again, that’s where, alright, do we, in flatbed – manufacturing is flatbed – it’s really simple. There aren’t as many teams for those; they’re available, but they come with a price. So if you’ve quoted a lane for this throughout Q3 and all of a sudden you have these hot and heavy loads, which is fine, that’s part of the things of being in logistics. You live for those moments; we live for the high blood pressure; we live for the game-winning shot or that moment that changes the whole trajectory of it. But the non-logistics folks – I preface this because this is an audience of non-logistics – because I’ve had these interactions and working through these relationships, is you’ve got to understand the realistic expectation of what’s really going to happen if your product is in Houston and you’re in Arkansas. Or let’s say, hypothetically, you are in Utah and your product’s in Houston. You’ve got to look at the miles.
I’ve always told non-logistics folks, 500 miles is the most a driver can drive. Then you have really good drivers that can go maybe 600 within their clock. Drivers have 11 hours to get from A to B. But if you’re looking at Houston to Utah, that looks like a two to three-day transit. So you’ve got to automatically account for an extra day for transit. Or you’ve got to look at your other plants. If you have partner plants or maybe a competitor that’s willing to sell you something because competitors do work together, and in food, it’s a really common thing in chicken for competitors to sell each other’s products and help each other out. So if that option is available, then that may be the quicker route. So you’ve got to put all your options out on the table.
If you have one of those emergency situations, yes, you want to service the customers, but one thing that I’ve also learned is that sales teams oftentimes are naive to the realities of making things happen. And while you may service the customer, meaning unrealistic expectations, yes, that, and not considering moral operating costs in their bottom line. And that, thankfully, I never really dealt with that in manufacturing in my manufacturing days, but I know other colleagues that did. And again, we all want to service the customer, the external and internal customer, but we have to realize that there are certain times when it works. Now, it becomes okay when you get the executives involved, when the C-suite gets involved, then it becomes okay, even though they always daily drive to keep the cost down, be smart about your expenses, but you have sales that just think things could just happen. Again, they aren’t in the space.
So they don’t know, but they’re a valuable part of the team because they’re pushing the product. They’re selling the product. But we have to be realistic. And then you also have the, ‘Oh, the wrong product was received,’ or ‘The product was damaged.’ That’s a later conversation. But the big one is we’ve got to get direct materials here because something came up. Now again, there, I’m open to all scenarios, right? That we can go to a coil facility, a metal coil facility. You know, you’ve got some really good known folks: SDI, Preo, Watco. Those are the three individual companies I worked with. You have a purchase team that handles all that. And sometimes it would be logical if you went to a different facility closer to the plant. But sometimes the way purchasing has it structured and worked, that’s the best way for reasons that I may not know, but I just need to trust purchasing that they know what they’re doing and that I just need to resolve and get the product, the material, to the facility. So that’s just an example that I’ve seen over and over again.
But non-Logistics folks, have an open mind, and don’t be threatening to fire, don’t be threatening to go down someone’s throat because they’re pushing back. They’re pushing back for reasons. They want to serve the customer. They want to help you hit your goals and what you’re going after. But they know the dynamics of the trucking companies, the rates, and the receiving hours of these facilities. Because with some of these, you have to basically the day before or two days before put your orders in. So if you’re going to go on a whim, you better know what you’re up against. And sometimes that doesn’t get acknowledged. And then you get the frustrations and the beef and the bitterness. But you have to understand the logistics folks are the ones, and the purchasing team, they are really familiar with these facilities. And so they’re going to offer expertise in areas that sales isn’t going to know, operations isn’t going to know.
The only, but I will tell you, operations does a really good job of, they know what the needs are most times, right? They have a computer. The daily checks, they’re saying, ‘Okay, we’re running low on this, so we better put an order in with the purchasing team.’ And then the logistics team sees that, and they’re going to plan trucks accordingly. In a perfect world, that’s how it works.
So, going back to the beginning of this conversation around you pivoting into becoming a broker, right? That was a change for you. Tell me a little bit about what you did as a broker. And if there are some specific things that you think manufacturers should know about, maybe that haven’t worked with a broker before, or it’s something they’re kind of considering for the first time.
I will do that because the business is on the line, and my name’s on the line. My name is associated with the success of this company, and I’m going to make sure that I know where it is. And if I don’t get the update, somebody’s phone’s going to be blown up so that I can get the answers I need. Okay, so you pivoted your career, let’s say if I’m saying this correctly. So you were at JB Hunt, then you transitioned into becoming a broker and worked with manufacturers to help them optimize logistics, and then you’ve transitioned into more of a logistics supervisor and then a logistics manager. Talk to me about your progression in your career.
Yes, so with being a broker, you have customers and you have a network of trucks, and based on the lanes, you work to find the carriers that best fit the lane or that are in your price point. That experience taught me the 24/7 mindset, the covering freight. I one time covered 20 trucks on a weekend for a customer from the Midwest to the West Coast. Not an ideal thing, but it was pretty remarkable because Monday morning, my team did not have to hustle to recover. They could have started with what the beginning of the week entailed. And so I remember I was covering loads that weekend from Sunday 2 am to Monday 2 am, and I mean it was 24/7. That is the tool that a lot of brokers and assets use. It provides rates, it provides miles, it provides information and cares and all, so that was a good tool to have for that particular project.
But as a logistics supervisor, my role was interfacing with drivers, building relationships. It’s being a head football coach in a way. I used to coach high school football, so I like to use sports references. So I think the audience may have been picking up on that by now. But you’re working with individuals that are older than you. They’re old enough to be your dad, your uncle, your grandpa sometimes. And so you’ve got to really be articulate, smart, how you’re going to convey good and bad news to them. But then it’s also working with the plant. So I have no Metal Manufacturing background, but with the plant leadership, I began to learn and understand, and we had a couple of bottlenecks that we resolved through communication, having a discussion. And sometimes they don’t want the details, but they’re going to need to know, ‘Hey, I want to help you out, but if you want this done, here’s what we’re working with. And if you’re able to help me by getting your order and stuff ahead of time, a couple of days before you normally would, I can plan trucks and we can work to get things there on time.’
Well, what would you say when you were in that role as a logistic supervisor was the hardest part of your job if you had to pick one thing?
I think it’s the driver interaction because I am basically like Dad. I had to deal with equipment breakdowns. I had to deal with the equipment vendors, and we had multiple. And we also had to make sure the drivers were happy. If they didn’t like their routes, we had to find ways to make it so that it fit them and the company’s needs. So it was the driver interaction. And then it was also when there was product damages and the drivers had to interface with the customers. You know, the drivers were the face of the company. You heard that message from the top down. And a lot of times, I would be right there talking to customers, and I’d have to talk to the drivers too. We had a situation one time where sales put in an order, and it went to one location close to the plant. But the truth is, it was three hours out, and sales are, ‘Well, can’t you just deliver it there?’ Like, ‘No, between the driver’s hours of service and the change of pace, like that day of is very bad and risky.’ And you’re entering into bigger problems with HR, the driver. So we had said, ‘Well, we’re going to have to reschedule this. We apologize to the customer.’ And then sales figured out, ‘Okay, I fat-fingered something, but we’ll get it right next time.’ And I’d say, ‘Hey, look, we couldn’t get it today, but we can try to get it to you, you know, maybe tomorrow, two days from now. But we’re going to try to get that handled as soon as possible.
You know, at the company I was at, they had a mantra: ‘can do attitude, own it, and act in love,’ and our leaders exemplified that. And it just went from the top down, and we just basically did everything we can to act in love, own it, and have a ‘can do’ attitude.
So in your last role, you were what’s called a logistics manager. Talk to me a little bit about what you did in that role.
Absolutely, I was a gatekeeper, and I moved chicken that you get to enjoy, and that everyone in the country gets to enjoy. And I’m a vegetarian, okay, so tofu is more of my jam, but continue. There you go, okay, very good. Well, in that role, it was a lot of managing carriers, also getting an influx of emails for carriers that can solve all my problems and more. That was always the intriguing thing. I think manufacturing companies, I’m sure, get emails from logistics companies saying, ‘I can promise you the world. I have 150 trucks, and I am your best friend.’ And I’m like, ‘I appreciate it, but I don’t know you, and I can’t take chances because I’m not well-versed.’
But it was a lot of making sure we delivered chicken on time to different facilities and worked with the internal customers, our distributors, our cold storage freezers. It was about making sure that we were able to get the product we need and also the materials needed to mix it in with the chicken because every customer has a different way they want their chicken. So when it came to direct materials, I remember I would have to send trucks a few times a week out to Georgia to get back to Arkansas, as well as sometimes moving machines from facility to facility. But then also getting chicken that was stored in a cold storage in the South, making sure that it got to our distribution standards and our plants in Arkansas, Oklahoma so that when I promised Company B their truck would be ready to get loaded, that I had the product.
So there was a lot of times with direct material where I would be faced with, ‘Oh, the truck didn’t show up,’ or there’s an issue, and it was like, ‘Okay, time to put on the ball cap and figure out how I’m going to expedite this process so that we can try to make our delivery commitments on time or recover.’ So there was a lot of that going on, direct materials was the name of the game, whether it was the product going to the customer or the materials needed to make the product so that it could be stored, go through its freezing process, and then be ready for trucking companies to pick up and deliver.
So knowing what you know about logistics and transportation because you were on the other side, if you were a buyer working for a manufacturer right now, what are the three things that you would want a buyer to know about transporting, getting their direct material products into the facility, and/or getting their end products to the customers? Obviously, you don’t want to get into the weeds, the details, but you definitely have an open mind.
Number one, to understand the realistic time frame of products getting from A to B. Number two, I would encourage the buyer to inquire about the reliability of the trucking company. What is the on-time delivery percentage? That’s a big indicator because you have the buyer can use whoever the company wants to use or they can save money or the hassle and outsource it to the actual company that’s making the product.
With the economic changes and impacts that are going on currently since 2022, we’ve seen a decrease in demand, which is really obviously coming from the consumers, what they’re telling us. And a lot of companies, instead of having me move their chicken, they had their options at a cheaper rate or their own trucking companies now. And so, you see there’s the reason why you ask for on-time delivery. Do I want to save money and do it my own and have my operational team handle it? Or do I want the company that the product’s coming from to deliver it to me? So those would be the two things.
So the first thing, keep an open mind. The second thing is get data on on-time delivery from this, and recovery options and all, and on-time pickup. On-time pickup is as important, but I’ve learned that on-time delivery is the difference maker. I think good companies will always plan ahead and will ask the trucks to be there a day early or a couple of hours before. And I’ve seen trucking companies show up late for pickup but still make on-time delivery. So it’s just understanding that what is your on-time delivery score and what are your service scores? Because there’s other factors and metrics that companies use. So I’d like to know about that as well.
Well, thank you for coming on the show today, Jose. Where would you like to send people to find you if they want to connect or know more?
You can find me on LinkedIn at Jose Socorro. I’m a guy with a beard, gel hair like this, with the American flag on the cover photo. Or you can find me on one of Sarah’s many posts doing karaoke and sing-alongs and finding songs to match your POs. So if you missed anything, you can check out the show notes. You can find us by typing in ‘What the Duck?! Another Supply Chain Podcast’ in Google to have the optimal search results. Make sure to add ‘Another Supply Chain Podcast’ to your search. This brings us to the end of yet another episode of ‘What the Duck?! Another Supply Chain Podcast.’ I’m your host, Sarah Scudder, and we’ll be back next week.